With the cost of healthcare and long-term care in the United States, it may be natural to assume that wealthy individuals live longer than those with less access to financial means. But is this assumption true?
Studies have shown that it is. Some early studies indicated that there was a fairly wide gap, but more recent studies have demonstrated that the gap, while it does exist, is not as big as previously assumed. Some of the reason for this is that people move between economic groups, rather than staying firmly in the groups they start in. The earlier studies did not account for these changes.
In more recent studies, researchers found that a man who is 40 years old and in a poorer economic group has a life expectancy of 75.2 years. For the same man in an upper-income group, it increases to just 77.6 years. That is more, but just by 2.4 years.
For women, the difference was even less, though similar. It came in at 2.2 more years for those in upper-income groups.
The difference does have an impact on estate planning. Wealthy individuals have more to leave to their heirs, but they also have potentially higher long-term care costs. While 2.4 years may not sound like much, someone who is paying to spend those 2.4 years in a high-end nursing home or assisted living facility has to plan for proper care and to cover the costs. At the same time, those with less money also have high end-of-life costs, which may be harder to cover and require even more careful planning.
If you are in this position, be sure you know exactly what options you have.